The Fraud Examiner

Social Media Sites: The Fraud Investigator’s New Best Friend... But “Friending” Can be Risky

February 2012 

By Peter Goldmann, CFE 


“Mining social media for clues is one of the fastest-growing areas of insurance-fraud investigation. (For example), workers compensation investigators might find that a supposedly injured employee is bragging about hang gliding and is posting action photos on Facebook” -- James Quiggle, Coalition Against Insurance Fraud


A growing number of fraud examiners, investigators and attorneys are finding that social media sites can be potentially powerful tools in investigating fraud. Case-in-point: a woman who claimed workers compensation benefits from an insurance company during a legal proceeding  went to jail after it was discovered that she posted details about her employment on her Facebook page. But there are legal traps to beware of...


Facebook For Fighting Fraud
At the corporate level, in-house attorneys and investigators have their own awareness challenges regarding fraud on social media. For example, they must be aware of attorneys’ professional responsibility rules in conducting social networking investigations.


Example: According to Jaclyn S. Millner, an attorney at Fitch, Johnson, Larson & Held, P.A. and  Gregory M. Duhl, Associate Professor of Law at the William Mitchell College of Law in St. Paul, Minn., there is nothing unethical or illegal about a defense attorney or an agent of the attorney, such as a company representative or investigator, accessing a fraud suspect’s information and photographs that are stored on a social-networking site and are not protected with privacy settings preventing public access.


In that sense, according to the Millner and Duhl -- who have researched and written extensively on the topic -- searching for public information on a social networking site is no different than video surveillance in any public location that defense counsel may authorize in a fraud investigation.


However, your organization’s attorney(s) cannot initiate contact with an opposing party -- such as an employee suspected of committing fraud -- who is represented by counsel. In that light, courts are likely to rule that it is a violation of professional ethics for the organization’s counsel to “friend” a suspect on Facebook or any other social media site if he or she is represented by counsel.

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